Why is Verizon suing over net neutrality rules it once supported?

Last year, Verizon and Google agreed on a set of network neutrality provisions …

In the wake of Verizon's decision to sue the FCC over its net neutrality rules, it's worth taking a look back at the rules Verizon actually supported last autumn. In an effort to head off the FCC effort, Verizon huddled quietly with Google and produced a "suggested legislative framework" for net neutrality. It looked quite remarkably similar to the rules eventually adopted at the FCC—the rules that Verizon has chosen to sue over now as being "contrary to constitutional right" and "otherwise contrary to law."

Excerpted below are the main Verizon/Google provisions, followed by their matching item in the FCC's "open Internet" order from December. All are exact quotes.

Area

Verizon/Google proposal

FCC rulemaking

Consumer protection

A broadband Internet access service provider would be prohibited from preventing users of its broadband Internet access service from (1) sending and receiving lawful content of their choice; (2) running lawful applications and using lawful services of their choice; and (3) connecting their choice of legal devices that do not harm the network or service, facilitate theft of service, or harm other users of the service.

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not block lawful content, applications, services, or non-harmful devices, subject to reasonable network management.

Non-discrimination

In providing broadband Internet access service, a provider would be prohibited from engaging in undue discrimination against any lawful Internet content, application, or service in a manner that causes meaningful harm to competition or to users.

A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service.

Transparency

Providers of broadband Internet access service would be required to disclose accurate and relevant information in plain language about the characteristics and capabilities of their offerings, their broadband network management, and other practices necessary for consumers and other users to make informed choices.

A person engaged in the provision of broadband Internet access service shall publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

Reasonable network management

Broadband Internet access service providers are permitted to engage in reasonable network management.

A provider that offers a broadband Internet access service complying with the above principles could offer any other additional or differentiated services. Such other services would have to be distinguishable in scope and purpose from broadband Internet access service, but could make use of or access Internet content, applications or services and could include traffic prioritization. The FCC would publish an annual report on the effect of these additional services, and immediately report if it finds at any time that these services threaten the meaningful availability of broadband Internet access services or have been devised or promoted in a manner designed to evade these consumer protections.

We recognize that broadband providers may offer other services over the same last-mile connections used to provide broadband service. These “specialized services” can benefit end users and spur investment, but they may also present risks to the open Internet. We will closely monitor specialized services and their effects on broadband service to ensure, through all available mechanisms, that they supplement but do not supplant the open Internet.

Wireless

Because of the unique technical and operational characteristics of wireless networks, and the competitive and still-developing nature of wireless broadband services, only the transparency principle would apply to wireless broadband at this time. The U.S. Government Accountability Office would report to Congress annually on the continued development and robustness of wireless broadband Internet access services.

Mobile broadband is at an earlier stage in its development than fixed broadband and is evolving rapidly. For that and other reasons discussed below, we conclude that it is appropriate at this time to take measured steps in this area. Accordingly, we require mobile broadband providers to comply with the transparency rule, which includes enforceable disclosure obligations regarding device and application certification and approval processes; we prohibit providers from blocking lawful websites; and we prohibit providers from blocking applications that compete with providers’ voice and video telephony services. We will closely monitor the development of the mobile broadband market and will adjust the framework we adopt today as appropriate.

What Verizon didn't like

The similarity here is astonishing, though the Verizon/Google proposal did make one other suggestion: it should be passed by Congress, not the FCC, and the FCC should not have "rulemaking authority" over nondiscrimination requirements and consumer protections. In other words, the FCC could have a bit of enforcement power, but it would be forbidden from writing key new regulations that might alter or expand its power over networks.

And that was apparently enough to set Verizon off. In a statement today, Verizon said that it was "deeply concerned by the FCC's assertion of broad authority for sweeping new regulation of broadband networks and the Internet itself. We believe this assertion of authority goes well beyond any authority provided by Congress, and creates uncertainty for the communications industry, innovators, investors and consumers."

When Congress addresses an issue, it doesn't muck about with it again for quite some time—just look at something like the Digital Millennium Copyright Act of 1998. Regulatory agencies can operate at a slightly less glacial pace, and the extra uncertainty this can create might be bad for investment. So now Verizon will duke it out in court with an agency that lost a similar battle in 2010—even though, on substance, it got exactly what it wanted.

48 Reader Comments

What Verizon wants now is to find a way to cripple then FCC from providing any oversight to their business practices - and knowing that many republican crooks have been appointed to courts they might get away with it - again. Or they just need to push the issue all the way up to the corporate-owned "supreme" court and get what they want.

Push as hard as possible to have the weakest reasonable laws/rules/whatever, that push as hard as possible to not have them enacted upon.

That is why you there is often the need to push for the hardest possible provisions and tweak to lighten them over time seeming like a generous regulator. To have half assed rulemaking, allows nothing to get done and sets up the next "showdown" in a few years for the next time when the pressure is up because the imbalances haven't been dealt with.

Or, someone at Verizon cracked open a history of the ICC and its regulation of the railroad industry, or they probably want to avoid a scenario known as regulatory capture.

To quote WikiPedia:

In economics, regulatory capture occurs when a state regulatory agency created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure, as it can act as an encouragement for large firms to produce negative externalities. The agencies are called Captured Agencies.

So...

If I'm reading that correctly, what they're trying to do is actually engage in regulatory capture, not avoid it, and this lawsuit is happening because they failed to do so fully.

Or in other words, they're throwing a tantrum because they don't want the FCC to muck around with the monopoly they bought and paid for when they licensed the spectrum from the FCC in the first place because it 'might' affect their bottom line...

I mean, for shame FCC for telling them that they should give the information that their customers requested instead of whatever drives their bottom line the most. Seriously.

I can't help but think of the scenario with the bicentennial man by Asimov. Where lawsuits get created and set up initially by the person desiring policies to go a certain way, and to errode and set up precedence to maneuver and set up laws that they wanted to begin with.

Of course they want it to go to Congress. Corporations nearly own Congress, and can have them nerf the FCC. By the time the matter gets around to the SCOTUS, Verizon can say "You can't reinstate FCC authority, we've already sunk billions into infrastructure and services while they were toothless. And if you do you'll have to grant us exception to their policies."

I think that they're betting that nobody is even remotely interested in trying such a stunt. If Genachowski had the stomach for that, he probably would have tried it already, rather than this approach. The current congress looks to be less likely to support such an attempt than the previous one (which didn't look particularly supportive either).

Whatever positive features reclassifying ISPs as common carriers might have, I don't think that anyone's going to go there for quite a while, for purely tactical/political reasons.

It's all really very simple. Verizon, like any sane and self respecting individual or corporation in the US, wants to keep the lawyers *out* of its business, and keep them out of the way of their relationships with their customers.

The simpleton, play-school concept about all of this is as follows: companies bad, FCC good, FCC helps people overcome bad companies, FCC = good Samaritan. It doesn't get any more childish than that...

Some people either don't want to understand, or else lack the capacity (I should say, the maturity) to understand that lawyers are chomping at their bits in the hopes that such legislation and rules-making will go into effect. Even as we speak, they are formulating a wide range of lawsuits to bring against those evil, despicable companies that committed the horrible crime of rolling out the broadband Internet in the US in the first place. These lawyers could give one bloody damn about "consumers"--hell no, they want in for themselves and for their own reasons--chiefly, their own fiscal enrichment. Chiefly? Nah, let's use "exclusively" instead.

For instance--when the FCC says "reasonable"--how do you define the term? Are litigation lawyers going to be content with allowing the FCC to define the term, or will they insist on defining it themselves--in any way that might enrich them at the expense of the broadband companies and, of course, their customers--who are the ones who will ultimately pay these bills.

It's all really very simple. Verizon, like any sane and self respecting individual or corporation in the US, wants to keep the lawyers *out* of its business, and keep them out of the way of their relationships with their customers.

It's all really very simple. Verizon, like any sane and self respecting individual or corporation in the US, wants to keep the lawyers *out* of its business

You missed something in your little screed there - you shouldn't of said there was a difference between "individual" and "corporation" it in, per AT&T's current privacy claims.Not bad, though, for a corporatist-froth rant.

It's all really very simple. Verizon, like any sane and self respecting individual or corporation in the US, wants to keep the lawyers *out* of its business, and keep them out of the way of their relationships with their customers.

The simpleton, play-school concept about all of this is as follows: companies bad, FCC good, FCC helps people overcome bad companies, FCC = good Samaritan. It doesn't get any more childish than that...

Some people either don't want to understand, or else lack the capacity (I should say, the maturity) to understand that lawyers are chomping at their bits in the hopes that such legislation and rules-making will go into effect. Even as we speak, they are formulating a wide range of lawsuits to bring against those evil, despicable companies that committed the horrible crime of rolling out the broadband Internet in the US in the first place. These lawyers could give one bloody damn about "consumers"--hell no, they want in for themselves and for their own reasons--chiefly, their own fiscal enrichment. Chiefly? Nah, let's use "exclusively" instead.

For instance--when the FCC says "reasonable"--how do you define the term? Are litigation lawyers going to be content with allowing the FCC to define the term, or will they insist on defining it themselves--in any way that might enrich them at the expense of the broadband companies and, of course, their customers--who are the ones who will ultimately pay these bills.

The problem with people who see everything as black or white, is that they tend to miss all the shades of gray inbetween.

It's all really very simple. Verizon, like any sane and self respecting individual or corporation in the US, wants to keep the lawyers *out* of its business, and keep them out of the way of their relationships with their customers.

The simpleton, play-school concept about all of this is as follows: companies bad, FCC good, FCC helps people overcome bad companies, FCC = good Samaritan. It doesn't get any more childish than that...

Some people either don't want to understand, or else lack the capacity (I should say, the maturity) to understand that lawyers are chomping at their bits in the hopes that such legislation and rules-making will go into effect. Even as we speak, they are formulating a wide range of lawsuits to bring against those evil, despicable companies that committed the horrible crime of rolling out the broadband Internet in the US in the first place. These lawyers could give one bloody damn about "consumers"--hell no, they want in for themselves and for their own reasons--chiefly, their own fiscal enrichment. Chiefly? Nah, let's use "exclusively" instead.

For instance--when the FCC says "reasonable"--how do you define the term? Are litigation lawyers going to be content with allowing the FCC to define the term, or will they insist on defining it themselves--in any way that might enrich them at the expense of the broadband companies and, of course, their customers--who are the ones who will ultimately pay these bills.

So they're keeping lawyers out of their business by sending theirs to attack the FCC? I guess a good offense IS a good defense...but you're still missing the point.

If Verizon didn't want these rules at all, they shouldn't pitch a proposal alongside Google. If they get what they want, they (like any other sane or self-respecting individual or corporation in the US) should sit down, shut up, and get back to work. Throwing what amounts to a tantrum just because they don't like <b>who</b> passed the rules looks just as immature as the people you accuse of seeing things in such simple terms.

Here's your shades of gray, WaltC. Corporations are created specifically for their own profits. That's not to say they will always go screwing the customers and anyone else when they can. They're supposed to worry about their bottom line. That's pretty much why any business exists.Governments are created specifically to steer how people and businesses interact with each other, their environment, and other countries and businesses. That's not to say they will always go screwing the people, businesses, and any other country they can. They're supposed to manage those interactions. That's pretty much why any government exists.

Now, why, in the majority of these threads related to Net Neutrality, does everyone attack the corporations you rush to defend? I think it has less to do with "good v evil". Moreso, business does not like laws and regulations because it takes the power to set policies on any subject away from the business and places it in the hands of government. Businesses are supposed to do what they can to make money, <b>but they are not charged with the setting and enforcement of policy that affects the entire country, and possibly further out.</b>

As a society, the U.S. is far too reliant on the Internet for communication policy to be dictated by the corporations providing the service. To exemplify this in simple terms, if you wanted your computer set up in one corner of your room, the tech support guy shouldn't ever say "Well, I want this computer next to your refridgerator, you'll shut up and like it!".

I always love the anti-regulation rhetoric when it spins up. Verizon's entire current business is due to U.S. government regulation, anyway. If regulation hadn't stepped in before, they'd still be the tiny Bell Atlantic portion of the almighty AT&T (as opposed to today's "at&t"). Regulation is a bit like a speed limit for business. Set it too restrictive, and you won't get anywhere. Leave it too high, and there will be problems. You gotta find the sweet spot.

Verizon's letter was a ruse to start with. The only legitimate complaint the telecoms have about net neutrality is the uncertainty argument. Basically any proposal that includes case by case assessment of legality leaves a lot of uncertainty where nobody really knows what's illegal and what's not. And this uncertainty creates inefficient use of capital (bad for telecoms and bad for the industry as a whole, and eventually bad for the consumer). This is as much an argument for hard, unambiguous rules as it is for no rules. You can have regulation of an industry without market uncertainty by simply creating rules and laws concerning the regulation instead of some principled goal with a "we'll keep our eye on you" tagged on. Telecoms don't want hard rules. So if you read Verizon's original letter you'll see that they proposed exactly a case by case framework of FCC oversight. They REQUESTED market uncertainty. The only reason I can think of why they would do that is so that they could appear to be "giving" something negotiation style, but then sue to get it back after the deal is done. They literally proposed giving up the only part of their argument that's valid. They wouldn't be dumb enough to have done that unless they were planning to leverage the validity of that argument to knock down the whole endeavor after it was built.

I think that they're betting that nobody is even remotely interested in trying such a stunt. If Genachowski had the stomach for that, he probably would have tried it already, rather than this approach. The current congress looks to be less likely to support such an attempt than the previous one (which didn't look particularly supportive either).

Whatever positive features reclassifying ISPs as common carriers might have, I don't think that anyone's going to go there for quite a while, for purely tactical/political reasons.

Some people either don't want to understand, or else lack the capacity (I should say, the maturity) to understand that lawyers are chomping at their bits in the hopes that such legislation and rules-making will go into effect. Even as we speak, they are formulating a wide range of lawsuits to bring against those evil, despicable companies that committed the horrible crime of rolling out the broadband Internet in the US in the first place. These lawyers could give one bloody damn about "consumers"--hell no, they want in for themselves and for their own reasons--chiefly, their own fiscal enrichment. Chiefly? Nah, let's use "exclusively" instead.

Cute, but there's a slight factual flaw in your 'argument'. The FCC rules do not create any private right of action for any customers. Only Congress can make such things. Members of the public can't even force the government to enforce laws they've put in place.

The new rules could only be enforced by the FCC, and their attorneys have no profit motive in spending more time in court. Generally, they have enough to be doing without rushing to resolve a dispute or apparent violation in the most burdensome way possible.

Just for you, though, I'll now lobby my congress-critters to pass network neutrality regulations with a private right of action, just so you actually have something to bitch about.

It's all really very simple. Verizon, like any sane and self respecting individual or corporation in the US, wants to keep the lawyers *out* of its business, and keep them out of the way of their relationships with their customers.

They want to make a big stink before they go out of business period. There business is dropping very fast and only thing they have cellular which can't support their network They are losing 100s of millions of dollars each month. If you look that the rewiring of the US is going on and none of their equipment is being used and they tried to stop it and they were told in no uncertain terms to get lost as all their other business in the cities will go down to nothing. All the FIOS will not be able to be supported and the fact of the rewiring in the area will mean that services will be gone and the regular phone will be VoIP from this ISP or Vonage as the two phone companies. So the only thing you can say that they are not long for this world. The cities and suburbs are fighting which one will be next in the rewiring and they don't care what Verizon says or does as they will live a short while. None of the states are willing to raise fees as they know they will not be around and don't care what they say as they know the money will not use to maintain the infrastructure but help them pay for the continuing losses that are suffering for the loss of business which is taking place quickly as the rewiring is taking place. So this is just trying to make noise before they go under and it is good PR to say they are around when the Ihone comes out. This was one of the reasons Nokia looked at ATT balance sheet and decided it didn't pay to come to US as they also not long for this world.